Well, it uses some sort of hashing algorithm to compare songs (think it even references some sort of online library).
What I do know is that it's very successfully found the same songs with different names in different locations (and even sometimes different lengths & bit-rates, but the latter I think may be done by filename or tag comparison)
Whatever the case, it's a remarkable piece of software, for a modest price what it does for you, and I've not found anything that remotely comes close to it in any other software or platform.
Theoretically, SingBird may eventually be able to achieve this with similar results, but that's still a long way off
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